Be aware as you begin looking for your new condo that there are new rules that could potentially hurt you if your looking for a FHA loan. FHA will put into place new rules that will limit borrowers ability to obtain FHA financing on a condo.

Specifically,

– Only 30% of all units in a development can be FHA Loans
– The development will need to be approved by FHA. Prior to this change FHA would allow
spot approvals on individual loans.
– The development will need to be at least 50% sold.
– The condo association will need to pay for a reserve study on an annual basis at a cost of
$3,000 to $5,000. Many associations only preform this every couple of years.
– FHA will not insure a loan if more that 15% of the members are deliquent on their dues. I am
unclear if this includes units that are REO or in Pre Foreclosure.

These changes will have a dramatic effect on potential buyers but also sellers as FHA loans are todays primary funding source for First Time Homebuyers.